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(Sean Kilpatrick/The Canadian Press)
(Sean Kilpatrick/The Canadian Press)

Weekes and Goldenberg

Negotiate free trade with China - or get left behind Add to ...

The highly publicized visit to the United States this week by Chinese President Hu Jintao is an occasion for Canada to address its own relationship with China. China's size and phenomenal growth are common knowledge. Sharing in that growth should be a Canadian priority.

The case for building a closer economic relationship with China for the long-term economic advantage of both partners is overwhelming. Successive Canadian governments have established and maintained excellent relations with China for much of the past half-century. After a rocky period a few years ago, relations are back on an even keel. The establishment 40 years ago of diplomatic ties was a bold and farsighted move on the part of the Canadian government of the day, and the time has arrived for another bold move.

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There are very important complementarities between the Canadian and Chinese economies. The most obvious is between Canada as a major producer of natural resources and China as one of the world's dominant consumers. This is not just about exporting non-renewable resources to China. Canadian firms have developed world-class expertise in mining and oil and gas production, expertise that could be marketed in China.

There is also major potential in the area of renewable resources. As its per capita income continues to rise, China will become increasingly dependent on imported food and agricultural products. A growing China will need to increase its imports of lumber and paper products. Both countries have been active in developing state-of-the-art technologies for protecting the environment. As well, Canadians are very competitive in the financial services field and these sectors would benefit from an enhanced economic relationship.

Facilitating this relationship is not just a task for trade negotiators. The necessary physical infrastructure needs to be put in place to allow Canadians to reap the opportunities in China. Nowhere is this more true than the energy sector, which would clearly benefit from the development of long-term customers in China and elsewhere in Asia. The proposed Enbridge Northern Gateway Project would help realize this objective. This project faces major challenges, particularly with respect to the protection of the environment and to meeting the legitimate concerns of the first nations over whose land a pipeline would pass. It will take imagination, ingenuity and a commitment from the most senior levels of our government to make this possible.

Last June in Ottawa, Prime Minister Stephen Harper and Mr. Hu "instructed officials to explore means of deepening the Canada-China economic partnership." We propose that Canada and China urgently embark on joint work to explore the feasibility of negotiating a free-trade agreement. The objective should be to reach a comprehensive economic and trade deal within five years. Time is not on our side. New Zealand, Chile and the ASEAN countries have negotiated free-trade agreements with China, and Australia is currently negotiating one. Canada cannot afford to wait until everyone else has a deal. Bold political leadership is needed in both countries to work toward that objective.

In many ways, a partnership and free-trade agreement with China would complement other initiatives by Canada to build relationships with key partners. We have NAFTA with the world's largest economy and we are negotiating a comprehensive economic and trade agreement with the European Union, whose 27 member states have a combined GDP larger than that of the United States. What would make more sense than to move now to build a new, strengthened relationship with the world's second-largest national economy?

John Weekes is a former Canadian ambassador to the World Trade Organization and was the chief Canadian negotiator of NAFTA; he is currently a senior business adviser to Bennett Jones LLP. Eddie Goldenberg was chief of staff to prime minister Jean Chrétien and is a partner at Bennett Jones LLP.

 

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